Working to end labour rights violations in India's granite quarries

Wednesday, April 10, 2019

The problem

In 2017, Dark Sites of Granite, a report by the Indian Committee of the Netherlands (ICN) and Stop Child Labour revealed that modern slavery, low wages, unsafe and unhealthy working conditions, along with the use of child labour, are rampant in granite quarries in South India, the world’s largest global producer of granite.[1] The study revealed that almost half of the studied quarries have direct links with foreign importers. FFG NL found in its report Financing of Granite Importers by Dutch Banks that two major Dutch banks – ING and Rabobank – have both provided loans to a total of three Dutch importers who purchase granite from quarries where labour and human right violations occur.[2] Within the supply chain of Dutch natural stone importers who are clients of ING (Kerasom) and Rabobank (Jetstone and Michel Oprey & Beisterveld) there have been cases of child labour, debt bondage, failure to provide health insurance for casual workers, and interference with the formation of labour unions.[3] Such violations of basic labour rights should not be supported by any financial institution. They also go against the policies of both ING and Rabobank, which endorse international labour rights including trade union freedom and a ban on forced and child labour.

Influencing activities

FFG NL engaged with ING and Rabobank, demanding that the banks make clear, time-bound agreements with their customers about working conditions and employee safety as well as the elimination of child labour and debt bondage.[4] Moreover, FFG NL demanded that the banks require their business customers to make contractual agreements with their suppliers, aimed at preventing and ending violations of labour rights. In June 2017, Tuur Elzinga, the International Secretary of the Dutch trade union Federatie Nederlandse Vakbeweging (FNV), began to engage in a dialogue with three banks (ING, ABN AMRO and Rabobank) on behalf of FFG NL, regarding the recommendations in the coalition’s study of the Financing of Granite Importers by Dutch Banks.

‘As FNV we think banks should encourage their business customers to cooperate with governments, trade unions and civil society organizations within an IMVO covenant on natural stone. Within this covenant we can make clear agreements to prevent any further labour rights violations.’ – Tuur Elzinga, International Secretary of FNV, December 2017.[5]

Change in financial institutions

The FFG NL report received much positive feedback from the banks, demonstrating a shift in banks’ mentality and political will. In Rabobank’s 2017 annual report, the bank reported that it has entered into dialogue with two of its clients about child labour. In a Twitter response to FFG NL, the bank stated: ‘We want customers to comply with international labour rights. If this does not happen, then we bring it up and if those calls do not turn out to be successful, then the customer relationship is ended.’[6]

ING also responded on Twitter, stating that ‘human rights are an extremely important part of responsible business for ING. Of course, we will look into the situation. ING is very actively involved in the NL Banking Agreement, which also includes the FNV and so we will certainly discuss this with them.’

Change in companies invested in

The ICN and FFG reports received significant media and political attention. The subject of labour rights and financial institutions’ responsibility to ensure adequate workplace environment and standards became a genuine concern and stimulated ongoing deliberations around the IMVO covenant (Agreements promoting International Responsible Business Conduct in the Netherlands) on natural stone. Both reports have also been taken very seriously by the financiers and the companies involved. For example, according to the ICN, some of the companies named in the report have conducted research into their value chain and have asked their Indian suppliers several questions around the issues raised. The Indian government also took the reports very seriously and commissioned local research in the sector to corroborate the findings of the ICN report. As a result, there is now more awareness among companies of the need to ensure compliance with the banks’ requirements; this has certainly been facilitated by FFG NL’s report and the ensuing discussion between the banks and their clients.[7]

Impact on the ground

Given that both studies are relatively recent, there is as yet no firm evidence demonstrating that working conditions in the granite quarries have improved since 2017. However, the fact that Indian suppliers and quarry owners are now being asked (compliance) questions by Dutch companies, among others, as a result of pressure from their financiers, is a good first step.

With the IMVO covenant on natural stone due to be signed later in 2019, it is safe to say that the ICN report and the Dutch FFG coalition’s study and campaign have significantly raised awareness among financiers and companies around these issues and has positively influenced their motivation to take action.[8] Moreover, the findings also influenced the ICN to include the financial sector in its future analysis. The ICN is also committed to participating in future monitoring of impact on the ground, especially once the IMVO covenant becomes operational, and specifically to investigate whether the highlighted issues – including child labour, debt bondage and freedom of trade association – have been